US-based autoimmune and severe inflammatory disease drug developer Viela Bio has floated in a $150m initial public offering after being spun off by pharmaceutical company AstraZeneca in 2018.
The offering consisted of 7.9 million shares issued on the Nasdaq Global Select Market on Thursday. The company increased the number of shares from 7.5 million but priced them at $19.00 each, at the bottom of the IPO’s $19 to $21 range.
Viela is developing treatments for autoimmune and severe inflammatory diseases and will put $50m of the IPO cash into supporting a Biologics License Application it has submitted to the US Food and Drug Administration on behalf of its lead drug candidate, Inebilizumab.
Inebilizumab is a monoclonal antibody being developed to treat neuromyelitis optica spectrum disorder, a condition that causes blindness and paralysis, and a further $40m will go to clinical trials for the candidate in additional indications.
Another $30m will fund development of VIB4920, a possible rheumatoid arthritis treatment expected to enter phase 2 clinical trials in 2020, while $10m has been earmarked for an autoimmune disease candidate known as VIB7734.
The company had raised $387m in funding including $75m in a June 2019 series B round led by HBM Healthcare Investments and backed by Goldman Sachs, Temasek, Terra Magnum Capital Partners, Barer and Son Capital, Viking Global Investors, Cormorant Asset Management and undisclosed existing backers.
AstraZeneca had invested $140m in Viela in February 2018 according to the IPO prospectus, with 6 Dimensions Capital – co-founded by pharmaceutical firm WuXi AppTec – co-leading a series A-2 round sized at $142m with Boyu Capital and Hillhouse Capital.
Temasek and Sirona Capital also contributed to the series A-2 round, before Viela received a further $30m in series A funding from investors including 6 Dimensions, Hillhouse Capital, Boyu Capital and Temasek in December.
Undisclosed shareholders agreed to purchase $70m of shares in the offering but those purchases were not reflected in the information regarding stake sizes that was provided in the prospectus. It did however confirm that all investors owning stakes of 5% or more are among the buyers.
AstraZeneca remained Viela’s largest shareholder despite its stake falling from 34.1% to 28.6% in the offering. It is followed by Boyu Capital (17.5% post-IPO), 6 Dimensions (8.3%), Hillhouse (8.7%) and Temasek (6.8%).
Viela’s shares rose on their first day of trading to close at $23.41 and had dropped slightly to $23.12 at close on Friday.
Goldman Sachs, Morgan Stanley and Cowen and Company are joint book-running managers for the offering while Guggenheim Securities is lead manager. They have the 30-day option to buy approximately 1.19 million more shares to close the IPO at almost $173m.
